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http://hdl.handle.net/10419/22161

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dc.contributor.author

Neary, J. Peter

en_US

dc.date.accessioned

2009-01-29T14:53:39Z

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dc.date.available

2009-01-29T14:53:39Z

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dc.date.issued

2004

en_US

dc.identifier.uri

http://hdl.handle.net/10419/22161

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dc.description.abstract

A two-country model of oligopoly in general equilibrium is used to show how changesin market structure accompany the process of trade and capital market liberalisation. Themodel predicts that bilateral mergers in which low-cost firms buy out higher-cost foreignrivals are profitable under Cournot competition. With symmetric countries, welfare may riseor fall, though the distribution of income always shifts towards profits. The model impliesthat trade liberalisation can trigger international merger waves, in the process encouragingcountries to specialise and trade more in accordance with comparative advantage.